Director's Column

Why “Networked Nonprofits” Succeed

By Doug Loescher | From Main Street Story of the Week | May-June 2012 |

Humbling.

That is a word that describes the past three years for a lot of nonprofit community organizations, including many Main Street programs. Budget cuts, staff reductions, membership decline, funding loss… these are the woes faced by many of us on the local, state, and national level. After years, if not decades, of growth, many of us have faced the prospect of seeing our programs shrink, perhaps for the first time in our history. In last year’s National Main Street Trends Survey, many local Main Street programs indicated that they were—at best—treading water. Few programs saw actual growth in their organizations—the traditional barometers of success for Main Street programs. But in the emerging world order, it’s worth stepping back and asking ourselves the question: is “growth” really necessary for success?

Recently, I was comparing notes on this subject with a colleague who heads up an international heritage tour program. She surprised me when she said: “the idea that you have to always grow to be successful… is just not true.” Despite some tough years of downsizing her organization—from gross revenues and staff levels, to number of events and scale of operations—she felt better than ever about her work. Why? As it turns out, conventional “growth” may not be the name of the game for her program—and perhaps not for our Main Street organizations, either.

A study published in the Stanford Social Innovation Review bears this out. The report challenges the conventional wisdom that says nonprofits must continually grow larger to “do the most good.” In fact, when looking at some of the world’s most successful organizations, the researchers found that nonprofits that stayed small, and shared their load with like-minded partners, did very well in reaching their mission objectives. In short, the Stanford report suggests that organizations such as Main Street might be better served by focusing less on growing themselves, and more on cultivating their networks.

Apparently, nonprofit leaders everywhere tend to view organizational growth, rather than impact, as their primary metrics of success. The Stanford Review illustrates how both the corporate and nonprofit sectors consider traditional forms of program growth —“whether scaling up existing programs, expanding to new locations, raising more money, or proliferating new programs to be a sign of vitality and impact.” But these days, growth is difficult. In fact, growth may distract us from the real goal, which is impact. Instead of growing our membership, revenues, or staffing, we can deepen our relevance by leveraging our network connections.

One of the examples cited in the report illustrates this point: an international microfinance entity called the Women’s World Banking Network, which hit its own glass ceiling of growth about 10 years ago. Growing the organization, in terms of staff or even funding, was just not sustainable. So instead, they spent the past decade staying small and focused instead on leveraging 53 other microfinance organizations to expand their combined impact, from 50,000 clients alone to 18 million together. That’s a 350-fold increase in clients served. And that’s the power of a “networked nonprofit,” which is a perfect description of the typical Main Street organization.

A good example is Bridgeton, New Jersey. Like so many Main Street organizations, Bridgeton Main Street has networked with other groups to collectively build a far more ambitious promotion calendar than they could do on their own, particularly when the organization hit a rough spot in 2008 and had to re-start the program from scratch. One of those events—a weekly downtown farmers market sponsored by Main Street—was limited by the organization’s capacity to run it. But after rebranding as the Bridgeton Outdoor Market at the Riverfront with weekly themes, Main Street found creative collaborators in spades, such as the“Dawg Days’ dog wash by the SPCA, animal days by the local zoo, and cooking events by a nearby university. It was just a small step then for Bridgeton Main Street to become a “networked nonprofit” itself, by joining a 10-group regional partnership that acts as rotating hosts for a series of Riverfests along the Cohansey River. All these activities now benefit downtown, without additional staff or funding demands on the Main Street program.

Back to the Stanford Review, its conclusion is that “networked nonprofits are some of the most effective nonprofits in the world,” which would seem to put our national network of downtown programs in a “world class” status of networked nonprofits, wouldn’t it? And perhaps that’s the secret behind the resilience and “impact” of so many Main Streets programs, whether they are “growing” or not.

Doug Loescher is the director of the National Trust Main Street Center.